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Google and Apple Face Over $50.4 Million in Fines for In-App Billing Irregularities in South Korea

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Published on: October 6, 2023 at 17:43 IST

South Korea’s telecommunications regulator has announced its intention to impose fines totaling up to 68 billion won ($50.42 million) on Google and Apple for their alleged violations of the country’s in-app payment laws.

In August 2022, the Korea Communications Commission (KCC) initiated an investigation into Google Play and the App Store regarding their enforcement of specific in-app payment methods and other irregularities concerning app developers.

Concluding the investigation, the commission has decided to levy a fine of 47.5 billion won on Google and 20.5 billion won on Apple.

This decision is based on the judgment that both companies violated South Korea’s revised Telecommunications Business Act by exploiting their monopoly power to compel local publishers to adopt specific billing systems and unreasonably delaying app reviews, as reported by Yonhap news agency.

The KCC also found Apple’s policy of imposing fees on domestic app developers to be a discriminatory practice.

The commission has called upon both Google and Apple to implement corrective measures, highlighting that their actions pose a significant threat to fair market competition.

The fine is subject to finalization after obtaining input from the companies and following the necessary deliberation procedures.

In 2021, South Korea’s National Assembly passed legislation prohibiting app store operators from mandating in-app payment systems for developers. This made South Korea the first country globally to introduce such restrictions on Apple and Google’s in-app billing policies.

Google responded to the situation, stating, “Since the start of the fact-finding investigation in August 2022, we have worked closely with KCC to explain how we are complying with the new law while ensuring that through our alternative billing, we continue to provide a safe and high-quality experience for all.”

Apple, on the other hand, contested the commission’s findings, emphasizing its longstanding collaboration with local app developers and its role in fostering a healthy local app ecosystem in South Korea. Apple stated, “We disagree with the conclusions made by the KCC in their Examiner’s Report, and believe the changes we have implemented to the App Store comply with the Telecommunications Business Act. As we have always done, we will continue to engage with the KCC to share our views.” Apple also underlined its respect for South Korea’s laws and its history of collaboration with the country’s app developers.

The companies will review the KCC’s “pre-notice” and respond accordingly once the final written decision is shared with them.